What is Legal Tender and the Promise to Pay

Legal Tender and the Promise to Pay

Legal Tender

The concept of legal tender is often misunderstood. Contrary to popular opinionOpinion A judge's written explanation of a decision of the court. In an appeal, multiple opinions may be written. The court’s ruling comes from a majority of judges and forms the majority opinion. A dissenting opinion disagrees with the majority because of the reasoning and/or the principles of law on which the decision is based. A concurring opinion agrees with the end result of the court but offers further comment possibly because they disagree with how the court reached its conclusion., legal tender is not a means of payment that must be accepted by the parties to a transaction, but rather a legally defined means of payment that should not be refused by a creditor in satisfaction of a debt.

The current series of Bank of EnglandEngland 47 boroughs, 36 counties, 29 London boroughs, 12 cities and boroughs, 10 districts, 12 cities, 3 royal boroughs boroughs: Barnsley, Blackburn with Darwen, Blackpool, Bolton, Bournemouth, Bracknell Forest, Brighton and Hove, Bury, Calderdale, Darlington, Doncaster, Dudley, Gateshead, Halton, Hartlepool, Kirklees, Knowsley, Luton, Medway, Middlesbrough, Milton Keynes, North Tyneside, Oldham, Poole, Reading, Redcar and Cleveland, Rochdale, Rotherham, Sandwell, Sefton, Slough, Solihull, Southend-on-Sea, South Tyneside, St. Helens, Stockport, Stockton-on-Tees, Swindon, Tameside, Thurrock, Torbay, Trafford, Walsall, Warrington, Wigan, Wirral, Wolverhampton counties (or unitary authorities): Bedfordshire, Buckinghamshire, Cambridgeshire, Cheshire, Cornwall, Cumbria, Derbyshire, Devon, Dorset, Durham, East Sussex, Essex, Gloucestershire, Hampshire, Herefordshire, Hertfordshire, Isle of Wight, Kent, Lancashire, Leicestershire, Lincolnshire, Norfolk, North Yorkshire, Northamptonshire, Northumberland, Nottinghamshire, Oxfordshire, Shropshire, Somerset, Staffordshire, Suffolk, Surrey, Warwickshire, West Sussex, Wiltshire, Worcestershire notes are legal tender in England and Wales, although not in Scotland or Northern Ireland, where the only currency carrying legal tender status for unlimited amounts is the pound coin.

Promise to pay

The “…promise to pay the bearer the sum of …” on Bank of England notes has nothing to do with legal tender status. The promise to pay stands good for all timeTime χρόνος. Judicial: Where any expression of it occurs in any Rules, or any judgment, order or direction, and whenever the doing or not doing of anything at a certain time of the day or night or during a certain part of the day or night has an effect in law, that time is, unless it is otherwise specifically stated, held to be standard time as used in a particular country or state. (In Physics, time and Space never exist actually-“quantum entanglement”) यमः , पुं, (यमयति नियमयति जीवानां फलाफलमिति । यम् + अच् । विश्वे च कलयत्येव यः सर्व्वायुश्च सन्ततम् । अतीव दुर्निवार्य्यञ्च तं कालं प्रणमाम्यहम् ॥यमैश्च नियमैश्चैव यः करोत्यात्मसंयमम् । स चादृष्ट्वा तु मां याति परं ब्रह्म सनातनम् ॥ and means that the Bank will pay out the face value of any genuine Bank of England note no matterMatter Normal matter is made of molecules, which are themselves made of atoms. Inside the atoms, electrons are spinning around the nucleus. The nucleus is made of protons and neutrons. Inside the protons and neutrons, exist indivisible quarks, like the electrons. All matter around us is made of elementary particles. ( building blocks of matter > quarks and leptons). All stable matter in the universe is made from particles that belong to the first-generation. Fundamental forces result from the exchange of force-carrier particles, which belong to a broader group called “bosons”. The strong force is carried by the “gluon”, electromagnetic force is carried by the “photon.” how old.

The promise to pay also holds good for damaged notes, as long as enough of the note survives to prove that it was genuine and no previous claimA Claim A claim is “factually unsustainable” where it could be said with confidence before trial that the factual basis for the claim is entirely without substance, which can be the case if it were clear beyond question that the facts pleaded are contradicted by all the documents or other material on which it is based. for it has been received. The Bank’s mutilated notes department receives some 23,000 claims a year for anything from fireFire It was created from stones approximately 400,000 years ago, or possibly much earlier. Researchers have discovered the earliest known instance of human-created fire, which took place in the east of England 400,000 years ago (in the village of Barnham). The Rigveda mentions the use of Agni for Yagna much earlier than 10,000 years ago. damage to notes eaten by all manner of household pets.

In order to fulfil its promise to its customers – the promise to pay – the Bank must ensure that the currency maintains as stable a level as possible, in other words, that the value of its notes is not eroded by inflationInflation It measures the change in prices of goods and services in the economy. A drop in inflation means that prices are now rising more slowly. Combined with wages now growing faster than prices, this makes the cost of living more affordable, because one can buy more with the money he earned. Lower inflation provides a sense of stability for businesses, which is important to empower them to make decisions about their future.. This is the role of monetary policy, which is one of the Bank’s main responsibilities. It must also guarantee the integrity of its notes; making sure that they are as difficult as possible to counterfeit, that they are readily and securely available to banks and building societies upon demandDemand In economics, the amount of a good or service that consumers are willing to buy at a particular price., and, subject to these constraints, that they are attractive and easily identifiable both to the humanHuman Ο άνθρωπος (Humanum> Homo sapiens) मानव:. We have failed to consider the minimum need to be a 'human'. For Christians, human beings are sinful creatures, who need some saviour. For Evolution biology a man is still evolving, for what, we don´t know. For Buddhist Nagarjuna, the realisation of having a human body is a mere mental illusion. We are not ready to accept that a human is a computer made of meat. For a slave master, a human person is another animal, his sons and daughters are his personal property.             eye and to note reading machines.

Paper moneyMoney Χρήματα, νόμισμα (currency), Old French monoie, Pecunia, Money supply, Reserve money, Monetary System, Money-laundering, Electronic Money, Money Transfer, Promissory notes. Coin of Alexander (330 B.C.E). Dematerialized form is Paper Currency( In USA 1600 CE and in 1861 in India). Money makes men. Balance of Payments, Net borrowing. Euro, Dollar, INR.

The first recorded use of paper money was in the 7th century in China. However, the practice did not become widespread in EuropeEurope EU and Countries - Albania Andorra Austria Belarus Belgium Bosnia and Herzegovina Bulgaria Croatia Cyprus Czech Denmark Estonia Finland France Germany Greece Hungary Iceland Ireland Italy Latvia Liechtenstein Lithuania Luxembourg Malta Moldova Monaco Montenegro Netherlands North Macedonia Norway Poland Portugal Romania Russia San Marino Serbia Slovakia Slovenia Spain Sweden Switzerland Ukraine United Kingdom Vatican City. for nearly a thousand years.

In 1694 the Bank of England was established and almost immediatelyForthwith In Rao Mahmood Ahmad Khan v. Ranbir Singh , has held that the word ‘forthwith’ is synonymous with the word immediately, which means with all reasonable quickness. When a statute requires something to be done ‘forthwith’ or ‘immediately’ or even ‘instantly’, it should probably be understood as allowing a reasonable time for doing it. The interpretation of the word ‘forthwith’ would depend upon the terrain in which it travels and would take its colour depending upon the prevailing circumstances which can be variable. (Shento Varghese v. Julfikar Husen & Ors [2024] 6 S.C.R. 409). Anwar Ahmad v. State of UP [1976] 1 SCR 779 : AIR (1976) SC 680; Nevada Properties (P) Ltd. v. State of Maharashtra & Anr. [2019] 15 SCR 223 : (2019) 20 SCC 119; State of Maharashtra v. Tapas D. Neogy [1999] Supp. 2 SCR 609 : 1999 INSC 417; Ravinder Kumar & Anr. v. State of Punjab [2001] Supp. 2 SCR 463 : (2001) 7 SCC 690; Bhajan Singh and Ors. v. State of Haryana [2011] 7 SCR 1 : 2011 INSC 422; HN Rishbud v. State of Delhi [1955] 1 SCR 1150 : (1954) 2 SCC 934; Sk. Salim v. State of West Bengal [1975] 3 SCR 394 : (1975) 1 SCC 653; China Apparao and Others v. State of Andhra Pradesh [2002] Supp. 3 SCR 175 : (2002) 8 SCC 440; Navalshankar Ishwarlal Dave v. State of Gujarat [1993] 3 SCR 676 : 1993 Supp. 3 SCC 754; Rao Mahmood Ahmad Khan v. Ranbir Singh [1995] 2 SCR 230 : (1995) Supp. 4 SCC 275; Bidya Deb Barma v. District Magistrate [1969] 1 SCR 562 : (1968) SCC OnLine SC 82.  started to issue notes in return for deposits. The crucial feature that made Bank of England notes a means of exchange was the promise to pay the bearer the sum of the note on demand. This meant that the note could be redeemed at the Bank for gold or coinage by anyone presenting it for payment.

These notes were handwritten on Bank paper and signed by one of the Bank’s cashiers. They were made out for the precise sum deposited in pounds, shillings and pence.

During the 18th century there was a gradual move toward fixed denomination notes which by 1745 were being part printed in denominations ranging from £20 to £1,000. In the latter half of the century gold shortages caused by war and revolution led to the production of £10, £5, £2 and £1 notes.

The first fully printed notes appeared in 1855 relieving the cashiers of the task of filling in the name of the payee and signing each note individually. The phrasing “I promise to pay the bearer on demand the sum of …” was introduced at this time and remains to this day.

In 1833 the Bank’s notes were made legal tender for all sums above £5 in England and Wales.

DesignDesign In India, design protection initially lasts for 10 years and can be extended for another 5 years i.e. protection can last for a maximum of 15 years.

Early Bank of England notes were printed in black on white with no design on the back. They were much larger than modern notes. Although the Bank experimented with colour, new designs and printing techniques, its notes remained essentially the same throughout the 19th and early 20th centuries.

The 1928 Series A 10 shilling and £1 notes were the first coloured notes to be issued by the Bank and the first to be printed on both sides. The “white fiver”, unchanged for 100 years, was eventually replaced by the 1957 Series B blue £5 note. It was not until the 1960 Series C (Portrait Series) notes that the portrait of the reigning monarch became a feature on the Bank’s notes.

BritishBritish "Britons" can refer to the Ancient Britons, the Celtic-speaking peoples of Great Britain during the Iron Age, whose descendants today include the Welsh, Cornish, and Bretons. The Union of the Crowns in 1603, followed by the creation of the Kingdom of Great Britain in 1707, helped forge a wider sense of British national identity. Yet this idea of “Britishness” was superimposed upon much older cultural identities of the English, Scots, and Welsh, whose distinctiveness continues to resist a fully homogenised identity. Greek explorer Pytheas referred to the islands collectively as αἱ Βρεττανίαι. The Celtic King Arthur was said to have established a kingdom on the British Isles. historicalHistorical Old or ancient facts, which could be verified, are recorded after following a system. 'In the beginning was God' is a faith statement, not a historical Fact. Itihas (iti-ha-asa) in Sanskrit means it was there or as it existed, which is part of Smriti Parampara, verified facts, and Puranas are a collection of old stories of the vedic nation, which can not be verified, but they are with the people and recorded in books without verification. figures have been depicted on the back of notes since the 1970 Series D (Pictorial Series). The character chosen has to have made an indisputable contribution to British history, be uncontroversial and, importantly, provide suitable pictorial material for the Bank’s design team.

The theme of historical figures has been continued for the current Series E (1990-1994). George Stephenson, Charles Dickens and Michael Faraday are depicted on the £5, £10, and £20 notes respectively. The £50 note features Sir John Houblon, the first Governor of the Bank.

Sir John Houblon

Born in 1632, Sir John was one of seven brothers of Huguenot descent. Two of his brothers also served as founder Directors of the Bank. It was on the site of Sir John’s own house that the Bank’s first premises in Threadneedle Street were built in 1734. Tradition has it that the pink colour of the Bank’s messengers’ coats owes its origin to the livery worn by Sir John Houblon’s household.

Printing Processes ( 2000 CE)

In 2000, three printing processes were used in the printing of banknotes.

1. Offset Litho
2. Intaglio
3. Letterpress

Offset Litho

The printing plates, which are manufactured in-house, transfer the ink to the paper via an intermediate offset roller. This process is used to print most of the front and back of the note, except for the portrait of Her Majesty The Queen, the lettering and the numbering. Offset printing involves a numberNumber Αριθμός of separate plates with different colours superimposed in close register to produce high quality, clearly defined images.

Intaglio

Intaglio printing is used to add the portrait of Her Majesty The Queen and the lettering to the front of the note. The ink rests in grooves engraved into the plate. When the plate comes into contact with the paper the ink is forcibly ‘drawn’ from the plate onto the paper under very high pressure. This produces the raised print which is one of the characteristics that gives Bank of England notes their distinctive feel.

Letterpress

Letterpress printing is used for the cypher and serial numbers on the front of the note. Ink is transferred onto the raised letters and digits are printed onto the note.

The printing and destruction of banknotes, the Bank of England is able to offer a range of commercialCommercial Profit-making economic activities, such as the production, consumption, exchange, and distribution of goods and services, are primarily undertaken to earn money or a livelihood. Key Features > (1) Involve sale and exchange of goods and services for consideration (money or value), (2) Aim to earn profit and ensure business growth, (3) Include risk-bearing and creation of utility, (4) Economic in nature and satisfy customer needs. Commercial Activities > Earning profit, Business growth, Serving society, Achieving market leadership. services through its subsidiary company Debden Security Printing Ltd (DSP). DSP is wholly-owned by the Bank of England and was primarily established to sell security printing services to customers both in the UKUK England has existed as a unified entity since the 10th century; the union between England and Wales, begun in 1284 with the Statute of Rhuddlan, was not formalized until 1536 with an Act of Union; in another Act of Union in 1707, England and Scotland agreed to permanently join as Great Britain; the legislative union of Great Britain and Ireland was implemented in 1801, with the adoption of the name the United Kingdom of Great Britain and Ireland; the Anglo-Irish treaty of 1921 formalized a partition of Ireland; six northern Irish counties remained part of the United Kingdom as Northern Ireland and the current name of the country, the United Kingdom of Great Britain and Northern Ireland, was adopted in 1927. See England and abroad. The Bank of England itself is prevented, under the terms of its 1694 Charter, from engaging directly in any commercial activities. DSP can also offer devices to protect the integrity of high-value consumer goods as well as providing security design, platemaking, ink and thread manufacture, training and consultancy services. Secure storage and destruction facilities are also available and the company markets a unique range of banknote-related giftware.

Banknote Production

The Bank of England( In 1946 it was brought into state ownership) has issued banknotes since it was founded in 1694 and today all English notes are produced at the Bank of England Printing Works, situated at Loughton in Essex. The Bank had the right to issue Bank notes in England and Wales, and acquired the monopoly after the Bank Charter Act of 1844.

Each year the Works produce nearly one thousand four hundred millionMillion 1,000,000 (one followed by six zeros), One billion (1,000,000,000) means a thousand million or one followed by nine zeros. A trillion (1,000,000,000,000) notes (enough notes, put end to end, to stretch half-way to the moon). The notes are produced at an average unit cost of well under three pence, making the Bank one of the most cost effective Central Banknote Producers in Europe. One of the aims at every stage is to ensure that the note is as difficult as possible to counterfeit. Some images are engraved by hand into metal plates, whilst others are created using a Computer-Aided Design (CAD) system and are drawn onto film by a laserbeam. When finished, the images are duplicated many times onto printed plates ready for the presses. The specialised inks used to produce the notes are also manufactured at the Printing Works; more than 100 are required for the four denominations.

The watermark design is engraved in wax and, like the metallic thread, the image is incorporated into the paper as it is made. The sheets of notes are then manually examined for flaws before the cypher and serial number are added.

Source: Bank of England

• “The Bank of England Note” by A D MacKenzie (Cambridge University Press, 1953)
• “Promises to Pay” by Derrick Byatt (Spink and Son, 1994).
• “As Good as Gold: 300 Years of British Bank Note Design” by V Hewitt and J M Keyworth (British Museum, 1987).